SEC Commissioner comments on reconciliation

  • SEC (old) Image

28 Oct 2005

In (PDF 76k) on 26 October 2005, US SEC Commissioner Paul S.

Atkins addressed the prospects for eliminating the SEC's requirement that IFRS filers provide reconciliations to US GAAP amounts and the prospects for a 'reverse reconciliation requirement' arising from CESR's recommendations for additional disclosures by companies using US GAAP to list in Europe. An excerpt:

I understand that European companies are concerned about continuing to bear the costs of reconciliation to U.S. GAAP on top of switching to IFRS. But, I am optimistic that Europeans and Americans can work together to eliminate this long-standing requirement in accordance with the 'roadmap' laid out earlier this year, contemplating a 2007-2009 timeframe of mutual recognition. I am confident that the need for reconciliation will disappear as all of us gain experience with IFRS in practice.

We in the U.S. are keenly aware that unnecessary reconciliation only imposes costs on investors on both sides of the Atlantic. For this reason, I am baffled at the suggestion by some that Europeans should begin to require U.S. companies to reconcile their U.S. GAAP financial statements to IFRS. This runs against the direction that we are taking in the United States and undermines our efforts towards mutual recognition. Some may assert that this is a useful bargaining chip to ensure that we Americans will recognize IFRS. But, I believe that it is counter-productive, ignores historical precedent and market practice, and diverts attention and energy from solving the real challenges before us. IFRS will stand or fall on its own merits. Our efforts should be focused on making sure that it succeeds.

Correction list for hyphenation

These words serve as exceptions. Once entered, they are only hyphenated at the specified hyphenation points. Each word should be on a separate line.